PFIs slammed

The Tories threadbare defence that private firms delivering public services saves the taxpayer money was shredded today, after the National Audit Office (NAO) revealed the use of privateers costs up to 40 per cent more.

The NAO report, released today (January 18) but compiled before the collapse of public service provider Carillion, found that the 716 private finance initiatives (PFI) currently in operation will cost the government ÂŁ199bn over the next 25 years.

The reports shows that PFIs can be 40 per cent more expensive than using government money alone.

Auditors found that private finance projects result “in additional costs compared to publicly financed procurement”.

Commenting on the report, chair of the public accounts committee and Labour MP Meg Hiller said, “After 25 years of PFI, there is still little evidence that it delivers enough benefit to offset the additional costs of borrowing money privately.

“Many local bodies are now shackled to inflexible PFI contracts that are exorbitantly expensive to change.

“I am concerned that the Treasury has relaunched PFI under new branding, without doing anything about most of its underlying problems. We need more investment in our schools and hospitals but if we get the contracts wrong, taxpayers pay the price.”

In the wake of the Carillion scandal Labour leader Jeremy Corbyn denounced the use of private firms to provide public services as a “costly racket”.

During prime ministers questions, he told Theresa May, “These corporations need to be shown the door. We need our public services provided by public employees with a public service ethos and a strong public oversight.”

Unite leader Len McCluskey scoffed at government claims that PFI schemes are responsible for “stimulating the economy and delivering better public services”.

He said, “For thirty long years, trade unions have been a lone voice warning that the private sector was not the best fit with our public services. We weren’t listened to but we need to be now.

“No longer can the labyrinthine structure of contracting and sub-contracting be regarded as a suitable foundation on which to rest our public services…No longer should government be handing over public money to companies that head to the casino intent on gambling on the fate of our public services.

“Public services ought to be just that, services provided for the good of the people. They are not to be monetised by boardrooms and subject to short-selling by the speculators.”